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What to Do About Moonlighting Workers

The “Get Rich Slowly” (GRS) blog recently posed this question to its participants: “Is it unethical to work a second job?” In response to the overwhelmingly positive support for doing so, the blog’s administrator wrote: “Interesting. … I thought this question would spur vigorous debate instead of generating unanimous support!”

“I think moonlighting is going to skyrocket—at least for people who are fortunate enough to find second jobs,” says Paul Falcone, human resources executive and author of the soon-to-be-released 101 Tough Conversations to Have With Employees: A Manager’s Guide to Performance, Conduct and Discipline Challenges (AMACOM, 2009).

That people have such strong interest in working second—or even third—jobs will come as little surprise to HR professionals. The question is what, if anything, should an employer do about it?

What Policies Should Not Include

Employers who turn first to policy language to address employee behavior should proceed with caution when it comes to moonlighting.

“I think the matter has more to do with practicality than anything else,” he says. “If someone comes to work exhausted because they spent the wee hours of the evening working at another company, there’s going to be a problem because it’s affecting their work,” Falcone says.

In his book, Falcone gives an example of a moonlighting situation that resulted in a written warning because the employee was working for an outside contractor at night and came to work tired the next day. The second job limited her ability to work overtime, and she had been seen making follow-up calls for her side business using her employer’s phone during work time.

But Falcone says he has never worked at a company where moonlighting was forbidden. However, he adds: “I have been involved in making sure that it’s not a conflict of interest in terms of working directly for a competitor.”

These are exactly the types of situations that can raise issues for employers and which should be addressed through policy, says Jennifer Berman, a managing director with CBIZ Human Capital Services. However, she notes that policies should not prohibit moonlighting in a general sense. “To categorically prevent an employee from having an outside job is typically not legal,” she says.

Audrey Mross, a former HR professional and current head of the labor and employment section at law firm Munck Carter in Dallas, agrees. Mross points out that a number of states have promulgated “lawful conduct statutes” that, in essence, say that an employer cannot take an adverse employee action against an employee for something that the employee does on their own time and away from the workplace. The exception—if the company has “good, legitimate reasons,” such as conflicts of interest.

What Policies Should Include

Berman recommends steering away from a specific “moonlighting” policy and instead making sure that the problems that the organization wishes to protect itself from are included in other policies.

“When we’re working with our clients we recommend that their employee handbooks include a general conflict-of-interest policy which would incorporate a number of different things all related to the idea that an employee’s first responsibility is to their full-time employer,” says Berman.

It is absolutely appropriate for employers to ensure that a second job does not represent a conflict of interest in terms of working for a competitor or sharing confidential or proprietary information or materials. In addition, employers must make sure that they don’t use company time, materials or proprietary information in the performance of that outside job, says Berman. Policies may outline the process an employee should use to determine whether or not the job represents a conflict of interest.

Other policies may address moonlighting issues without necessitating the development of a “moonlighting policy.”

“It’s not really an issue of moonlighting so much as it is an issue when employees are not able to perform their job duties,” says Berman. It becomes a disciplinary issue, which is most likely covered in an existing policy.

Nonsolicitation policies might come into play in situations where, for example, employees might be selling products such as Pampered Chef or Avon “on the side.” Nonsolicitation policies might exist to avoid issues related to perceived coercion (when a manager is selling to his or her employees, for example) as well as to protect against union solicitation activities.

“When the union comes calling and they want to start engaging in their organizing efforts, you can’t stop them if you’ve allowed other solicitation,” says Mross. “If you try to stop the union solicitation, now you’re engaged in potentially unfair labor practices.”

Beyond Policy

Beyond policy language, HR professionals should make sure that management staff is aware of what they can and cannot do about outside employment. For example, in most cases it would be inadvisable to forbid an employee from holding a second job.

But the actions of managers, even in the presence of clearly stated policies, can create problems for organizations.

“You can back yourself into a garden-variety Title VII claim,” Mross says, if policies are not applied consistently and if, however unintentionally, a protected employee is adversely impacted.

When it comes to addressing issues related to moonlighting, common sense should prevail, says Berman, and the focus should be on legitimate, employment-related concerns. The bottom line, she says, is: “We’re not telling you what you can or cannot do while you’re outside the office unless you’re violating our specific rights.”